These proposed amendments are the outcome of a review of the 2015 amendments, which limit the circumstances in which a developer could rescind a contract to ensure that developers did not misuse sunset clauses in order to resell the properties for a higher price.
Despite the 2015 initial amendments, the Government is of the view that purchasers of off-the-plan properties require further protection.
The amendments introduce vendor disclosure requirements to off-the-plan contracts and give purchasers access to remedies and relief where the disclosures are inaccurate or differ to the final registered documents, that would not otherwise be available in typical off-the-plan contracts.
The changes include the following:
- the cooling off period is extended to 10 business days, that can be reduced or waived by way of a s.66W certificate;
- a disclosure statement must be attached to a contract which includes the plan and copies of any documents prescribed by the regulations, which would be the proposed by-laws, easements, covenants and schedule of finishes and other relevant details (such as, details of the development consent);
- at least 21 days before completion, the vendor must serve on the purchaser a notice of changes if the vendor becomes aware that the disclosure statement was inaccurate at the time the contract was signed or has become inaccurate after the contract was signed and that inaccuracy will, or is likely to, adversely affect the use or enjoyment of the subject lot (Material Particular);
- the purchaser may rescind the contract within 14 days, if after receiving the notice of any change or after receiving the registered documents, the disclosure statement includes any inaccuracy to a Material Particular such that the purchaser would not have entered into the contract and would be materially prejudiced by the inaccuracy;
- the vendor must serve copies of the registered plan and any other document that was registered with the plan at least 21 days before completion;
- deposits must be held in relevant trust accounts;
- service of notices can now be served by email;
- contracts, including deeds and execution of these documents can now be created in electronic form and electronically signed or attested – although it is not clear how a signature on a deed is to be witnessed electronically in order to be satisfactorily witnessed; and
- the existing sunset provisions are clarified to make it clear that the provisions do not limit the Court’s power to award damages against the vendor if an order permitting the vendor to rescind the contract under a sunset clause is made.
This new regime better reflects the circumstances of off-the-plan contracts as it focuses on providing information of the end-product of the property, which should better meet the needs and expectations of purchasers.
The increased focus on incorporating technology into off-the-plan contracts will be more convenient for all parties and it is expected to reduce the delay and cost involved. However, increased security measures must be carefully considered to prevent the misuse of technology and fraud.